Advanced Topics in United Nations Logistics: The Provision ... · Lesson 2 Standard Elements of the COE System and Lease Options. 28. Section 2.1 Implementation 30 ... Section 5.2

Peace Operations Training Institute®

Study peace and humanitarian relief any place, any time

Course Author

Major Donald Leslie (Retired)

Canadian Forces

series editor

Harvey J. Langholtz, Ph.D.

Advanced Topics in United Nations Logistics: The Provision of Troops and Contingent-Owned Equipment (COE) and the Method for Reimbursement

Peace Operations Training Institute®

Study peace and humanitarian relief any place, any time

Course Author

Major Donald Leslie (Retired)

Canadian Forces

series editor

Harvey J. Langholtz, Ph.D.


Cover Photo: UN Photo #628389 by JC

McIlwaine. British Royal Air Force C-130

Hercules Deployed to Assist UNMISS. 09 April

2015.

© 2016 Peace Operations Training Institute. All rights reserved.

Peace Operations Training Institute 1309 Jamestown Road, Suite 202 Williamsburg, VA 23185 USA www.peaceopstraining.org

First edition: May 2004 Second edition: December 2006 Third edition: February 2013 Fourth edition: January 2016

The material contained herein does not necessarily reflect the views of the Peace Operations Training Institute (POTI), the Course Author(s), or any United Nations organs or affiliated organizations. The Peace Operations Training Institute is an international not-for-profit NGO registered as a 501(c)(3) with the Internal Revenue Service of the United States of America. The Peace Operations Training Institute is a separate legal entity from the United Nations. Although every effort has been made to verify the contents of this course, the Peace Operations Training Institute and the Course Author(s) disclaim any and all responsibility for facts and opinions contained in the text, which have been assimilated largely from open media and other independent sources. This course was written to be a pedagogical and teaching document, consistent with existing UN policy and doctrine, but this course does not establish or promulgate doctrine. Only officially vetted and approved UN documents may establish or promulgate UN policy or doctrine. Information with diametrically opposing views is sometimes provided on given topics, in order to stimulate scholarly interest, and is in keeping with the norms of pure and free academic pursuit.

Versions of this course offered in other languages may differ slightly from the primary English master copy. Translators make every effort to retain the integrity of the material.

v

PEACE OPERATIONS TRAINING INSTITUTE

Table of Contents


Foreword x

Method of Study xi

Course Objective 12

Course Outline 12

Primary Sources 15

Lesson 1 The Evolution of Troop and COE Reimbursement 16

Section 1.1 The Evolution of Troop Costs 18

Section 1.2 The Focus on COE Reimbursement 18

Section 1.3 Reform Project Plan and Timeline 20

Section 1.4 The COE Manual 22

Section 1.5 References 22

Lesson 2 Standard Elements of the COE System and Lease Options 28

Section 2.1 Implementation 30

Section 2.2 Retroactivity 30

Section 2.3 Binding Arrangements 30

Section 2.4 Reimbursement/Lease Options 30

ADVANCED TOPICS IN UNITED NATIONS LOGISTICS


vI

Section 2.5 Transportation 31

Section 2.6 Loss and Damage 32

Section 2.7 Mission Factors 33

Section 2.8 Verification and Control 34

Section 2.9 Major Equipment 35

Section 2.10 Self-Sustainment 35

Section 2.11 Reimbursement During Withdrawal 36

Section 2.12 Claims for Reimbursement 37

Section 2.13 Dispute Resolution 37

Lesson 3 Standards, Verification, and Control 40

Section 3.1 Purpose 42

Section 3.2 Verification Guiding Principles 42

Section 3.3 Major Equipment Standards 43

Section 3.4 Self-Sustainment Standards 44

Section 3.5 Conduct of Verification Inspections 47

Section 3.6 Types of Inspections 47

Lesson 4 Transportation Procedures 54

Section 4.1 Preparation Costs 56

Section 4.2 Deployment and Redeployment of Personnel 56

Section 4.3 Deployment and Redeployment of Equipment 57

Section 4.4 Inland Transportation 58

Section 4.5 Rotation of Equipment 59

Section 4.6 Transportation of Spare Parts and Consumables 60

Section 4.7 Loss, Damage, or Injury in Transit 61

Section 4.8 Transportation Example 61



vII

Lesson 5 Special Equipment Rates 64

Section 5.1 Definition 66

Section 5.2 Procedure 66

Section 5.3 Loss or Damage 67

Section 5.4 Determination of Rates 67

Section 5.5 Application for Special Case Equipment 68

Section 5.6 Sample Calculation 68

Lesson 6 Equipment Loss and Damage 72

Section 6.1 No-Fault Incidents 73

Section 6.2 Loss, Damage, or Injury in Transit 74

Section 6.3 Liability for Third Party Damage to Major Contingent-Owned Equipment 74

Section 6.4 Hostile Action or Forced Abandonment 75

Section 6.6 Special Equipment 77

Section 6.7 Reporting of Loss or Damage 77

Lesson 7 Mission Factors 80

Section 7.1 Determining Mission Factors 82

Section 7.2 Extreme Environmental Conditions 83

Section 7. 3 Hostile Action/Forced Abandonment 86

Section 7.4 Intensity of Operations 91

Section 7.5 Sample Calculation of Mission Factors 93

Lesson 8 Major Equipment Rates 96

Section 8.1 Standards 97

Section 8.2 General Conditions 105

Section 8.3 Rate Table 107



vIII

Lesson 9 Self-Sustainment Rates 112

Section 9.1 Categories of Self-Sustainment 114

Section 9.2 Rate Table 130

Lesson 10 Management Responsibilities 134

Section 10.1 Director of Field Support (DFS) Organizational Chart 136

Section 10.2 UN Headquarters Responsibilities Matrix 137

Section 10.3 Peacekeeping Mission Responsibilities Matrix 142

Section 10.4 Memorandum of Understanding Articles 146

Section 10.5 General Conditions for Personnel 146



Ix

Appendices

Appendix A: List of Acronyms 150

Appendix B: Current Peacekeeping Missions 153

Appendix C: Glossary of Terms 154

Appendix D: Major Equipment Rate Table 158

Appendix E: Sample MOU 179

About the Author: Major Don Leslie (Retired) 196

Instructions for the End-of-Course Examination 197



x

The evolution of the COE System of Reimbursement is an example of the achievements that can

be accomplished when the UN Secretariat and Member States focus their efforts on resolving common

problems. This collaboration permitted remarkable achievements within a short period of time. It

took only six months from the date of the approval to proceed with changes to the reimbursement

methodology to the date that a solution was developed. That solution also included the participation of

70 Member States. This speaks volumes of the leadership and organization of the Working Groups to

produce results. As Colonel Bo Brandt, Counsellor and Military Adviser, Permanent Mission of Denmark

to the UN and Vice-Chairman of the Phase II Working Group so aptly put it on a daily basis “I smell

the scent of consensus.” Though not everyone’s concerns could be satisfied, the spirit of cooperation

meant that a solution could be achieved and that unresolved issues could be handled separately by the

Secretariat.

It then took less than a year to transform the principles and recommendations into a resolution

approved by the General Assembly. Again through the combined efforts of the Secretariat and Member

States, the momentum for change continued to produce a workable system for all parties. Some might

say there is a better system, but the COE system addresses complex issues and satisfies the majority

of both Secretariat and Member State concerns. From the start, the focus of COE was to reduce the

administrative burden imposed by the survey method that was in use at the time. It has been nearly 20

years since the COE system was adopted, and it has become the cornerstone for financing equipment

and services provided by Member States to UN missions around the world.

Since I used the COE Manual as the main reference for this course, you may encounter different

terms for the same thing. Most notably is the use of “Member State” and “Troop/Police-Contributing

Countries (TCC/PCC)”. While I am sure that these terms have different meaning for the UN, they can be

used interchangeably here to signify the country that provides troops and equipment to UN missions,

since it is only to Member States of the UN that the COE system applies.

This course is an updated version of the 2013 course, based on changes in the new COE Manual. As

always, the COE Manual and the associated UN documents should always be consulted for the practical

application of the COE methodology.

—Don Leslie, 2016.

Foreword



xI

Method of Study

This self-paced course aims to give students flexibility in their approach to learning. The

following steps are meant to provide motivation and guidance about some possible strategies

and minimum expectations for completing this course successfully:

• Before you begin studying, first browse through the entire course material. Notice the lesson

and section titles to get an overall idea of what will be involved as you proceed.

• The material is meant to be relevant and practical. Instead of memorizing individual details,

strive to understand concepts and overall perspectives in regard to the United Nations system.

• Set personal guidelines and benchmarks regarding how you want to schedule your time.

• Study the lesson content and the learning objectives. At the beginning of each lesson,

orient yourself to the main points. If possible, read the material twice to ensure maximum

understanding and retention, and let time pass between readings.

• At the end of each lesson, take the End-of-Lesson Quiz. Clarify any missed questions by re-

reading the appropriate sections, and focus on retaining the correct information.

• After you complete all of the lessons, prepare for the End-of-Course Examination by taking

time to review the main points of each lesson. Then, when ready, log into your online student

classroom and take the End-of-Course Examination in one sitting.

» Access your online classroom at <www.peaceopstraining.org/users/user_login> from virtually anywhere in the world.

• Your exam will be scored electronically. If you achieve a passing grade of 75 per cent or higher

on the exam, you will be awarded a Certificate of Completion. If you score below 75 per cent,

you will be given one opportunity to take a second version of the End-of-Course Examination.

• A note about language: This course uses English spelling according to the standards of the

Oxford English Dictionary (United Kingdom) and the United Nations Editorial Manual.

Key Features of Your Online Classroom »

• Access to all of your courses;

• A secure testing environment in which to complete your training;

• Access to additional training resources, including multimedia course

supplements;

• The ability to download your Certificate of Completion for any completed

course; and

• Forums where you can discuss relevant topics with the POTI community.


12

Introduction »

Course Objective

The purpose of this course is to provide students with an in-depth look at the provision of, and

reimbursement for, troops and equipment that Troop/Police-Contributing Countries (TCC/PCCs) provide

to UN peacekeeping missions. The primary reference will be the UN COE Manual, which was last adopted

in January 2015. The lessons follow the same sequence of the COE Manual for ease of reference for

students.

The COE system is the foundation upon which the UN obtains personnel and equipment from TCC/

PCCs. Designed to simplify administration through the use of standard rates for troops and generic

types of equipment, the COE system has been evolving since being approved by the General Assembly

in June 1996. It is important that students understand what the system is designed to achieve and the

rationale behind its creation. There are literally billions of dollars being spent by the UN for troops and

equipment, and the COE system was created based on the premise that “the UN pays for what it wants.”

The End-of-Lesson Quizzes will focus on practical examples wherever possible to allow the student

to be familiar with the classification of equipment and personnel services, the application of standard

rates, and the processes involved in completing an agreement. Note: Money is in U.S. Dollars.

Course OutlineLesson 1: The Evolution of Troop and Contingent-Owned Equipment Reimbursement

In Lesson 1, the student will be exposed to the history of how troops and equipment have been

provided by Member States to UN peacekeeping missions. The lesson will cover the development of the

reimbursement process for troop costs. The reimbursement for COE up to 1996 will also be discussed as

a prelude to the emergence of the current COE system.

This lesson will explain how and why the COE system was developed and state its goals and

objectives. A chronological presentation will take the student through the five phases of Working Groups

that prepared the concept and the associated UN regulatory meetings that led to the General Assembly’s

approval of the system and procedures.

The lesson will close with a segment on the various references that apply to the provision of troops

and equipment to UN missions and the related reimbursement procedures. It will be stressed that the

student becomes familiar with these references, both for success with the course and, more importantly,

for use by Member States on actual missions. Applicable excerpts from the references will be provided

as part of the course package.

Lesson 2: Standard Elements of the COE System and Lease Options

Lesson 2 will describe the elements of the COE system, including their purposes and underlying

concepts. After an introduction of the major concepts behind the COE system, the following elements

will be discussed:

• Retroactivity


13

• Binding Arrangements

• Reimbursement/Lease Options

• Transportation

• Loss and Damage

• Mission Factors

• Verification and Control

• Major Equipment

• Self-Sustainment

• Reimbursement During Drawdowns/Termination of Mission

• Dispute Resolution

Lesson 2 will close with a summary of the interaction of the elements and a restatement of the goals

and objectives of the COE system. It is important that the student understand the nature of the COE

system and the rationale behind its key elements.

Lesson 3: Standards, Verification, and Control

Lesson 3 will discuss the standards upon which the COE system is built. The lesson will explore the

guiding principles behind reimbursement for major equipment and for self-sustainment. In addition, the

verification and control process will be explained, and students will be exposed to the three types of

inspections used in a mission area.

The lesson will focus on the standards laid out in the COE Manual. It is very important that students

understand the meaning and application of the standards as a basis for reimbursement negotiations. By

the end of this lesson, the student should be familiar with the requirements for reimbursement based

on the standards set forth in the COE Manual. They should also be conversant with the processes for

verification and control for personnel, equipment, and materials.

Lesson 4: Transportation Procedures

Lesson 4 will cover the procedures and regulations governing the preparation and transportation

of equipment to and from a mission as a part of a COE agreement. The lesson will expose students

to the aspects of transportation costs that are reimbursable through the UN for both deployment and

sustainment equipment and materials. The lesson will also describe UN responsibilities for inland

transportation within the boundaries of a Member State when en route to the mission area. Finally, this

lesson will discuss the responsibilities for loss and damage of equipment when in transit to and from the

mission area.

Lesson 5: Special Equipment Rates

Lesson 5 will provide the student with insight into the procedures for negotiating rates for specialized

equipment that cannot be categorized into a generic group. The lesson will cover the rationale for

establishing this procedure and the instances when it is to be applied. Students will be provided with the


14

formulas for calculating special rates and shown how to apply to the UN to determine reimbursement

rates. The End-of-Lesson Quiz will include a practical example for the students to complete.

Lesson 6: Equipment Loss and Damage

Lesson 6 will familiarize the students with the responsibilities and procedures related to the loss and

damage of equipment and supplies provided under the COE Agreement. The lesson will differentiate the

liabilities between the UN and Member States and show how and when the UN authorizes compensation.

Students will be provided with several scenarios as a demonstration of the application of the loss

and damage procedures. Since Member States can have a variety of claims dependent upon the level of

major equipment and self-sustainment support they are providing to their contingents, it is important

that the student recognizes the circumstances under which claims will be approved. This will also include

a brief segment on the reporting of loss and damage to the UN.

Lesson 7: Mission Factors

Lesson 7 will provide the student with knowledge as to the purpose and calculation of Mission

Factors as part of the COE reimbursement process. Since mission factors are designed for additional

reimbursement based on the rigors of a specific mission area, it is important that the student realize the

situation and requirements that have to be met. The student will learn how the UN determines mission

factors and the elements used in the decision-making process. The student will also be provided with a

practical example to test his/her ability in determining mission factors.

Lesson 8: Major Equipment Rates

Lesson 8 provides the student with in-depth exposure to the actual rates used to calculate

reimbursement for major equipment. Building upon previous lessons, Lesson 8 will use examples and

scenarios to familiarize the student with wet and dry lease, generic equipment groups, and the roles

and responsibilities for rate calculations. The latest rate tables will be provided to the student.

Building on the standards and principles of Lesson 3, Lesson 8 will provide more detail as to the

specific standards for each category of major equipment. Explanations and examples will be provided to

demonstrate the application of the standards to both major equipment and self-sustainment.

Lesson 9: Self-Sustainment Rates

Lesson 9 is similar to Lesson 8, but focuses on personnel-based self-sustainment rates. The lesson

provides the student with an in-depth exposure to the actual rates used to calculate reimbursement

for major equipment. Building upon previous lessons, Lesson 9 will use examples and scenarios to

familiarize the student with wet and dry lease, categories of self-sustainment, service level standards,

and the roles and responsibilities for rate calculations. The latest rate tables will be provided to the

student.

Building on the standards and principles of Lesson 3, Lesson 9 will provide more detail as to the

specific standards for each category of self-sustainment. Explanations and examples will be provided to


15

demonstrate the application of the standards to both major equipment and self-sustainment.

Lesson 10: Management Responsibilities

Lesson 10 will provide the student with an insight into how COE Agreements are prepared, approved,

and managed. This lesson will cover the responsibilities of UN Headquarters, Mission Headquarters,

Member States, and contingents through a progression from initial identification of a mission to the

deployment and repatriation of troops and equipment. This lesson will describe the composition of

the formal agreement, a Memorandum of Understanding that the UN uses to requisition troops and

equipment from Member States. This lesson will provide an example of the MOU and guide the student

through a description of its contents and process for completion. This will expose the student to the

documentation and level of detail required completing and managing a COE Agreement.

The objective of this lesson is to provide the student with an understanding of the complexities and

detail involved in completing COE Agreements. The scenarios will be present from a UN and Member

State point of view to demonstrate how differences can arise in preparing a COE Agreement. This will

demonstrate to the student how the concept of voluntary contributions, as described in Lessons 2, is

applied to COE Agreements.

Primary Sources

Major sources used in the development of this course include:

• United Nations, General Assembly, Manual on Policies and Procedures Concerning the

Reimbursement and Control of Contingent-Owned Equipment of Troop/Police Contributors

Participating in Peacekeeping Missions (COE Manual), A/C.5/69/18 (20 January 2015), available

from <http://www.un.org/en/peacekeeping/documents/2014_COE_Manual.pdf>.

• United Nations, General Assembly, Report of the 2014 Working Group on Contingent Owned

Equipment, A/C.5/68/22 (1 April 2014), available from <http://www.un.org/ga/search/view_

doc.asp?symbol=A/C.5/68/22>.

• United Nations, General Assembly, Advisory Committee on Administrative and Budgetary

Questions, Triennial review of the rates and standards for reimbursement to Member States for

contingent-owned equipment, A/68/867 (7 May 2014), available from <http://daccess-dds-ny.

un.org/doc/UNDOC/GEN/N14/327/69/PDF/N1432769.pdf?OpenElement>.

• United Nations, General Assembly, Triennial review of the rates and standards for reimbursement

to Member States for contingent-owned equipment, A/RES/68/282 (5 August 2014, Adopted

30 June 2014), available from <http://www.un.org/en/ga/search/view_doc.asp?symbol=A/

RES/68/282>.

• Department of Field Support Website. United Nations Peacekeeping (UN News Center) <http://

www.un.org/en/peacekeeping/about/dfs/>.

Information in this course does not replace or supersede official United Nations documentation.

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In this lesson » Lesson Objectives »



LESSON

Lesson TOCFramework for a Global Organization, Past and Present

Section 1.1 The Evolution of Troop Costs

Section 1.2 The Focus on COE

Reimbursement

Section 1.3 Reform Project Plan and

Timeline

Section 1.4 The COE Manual

Section 1.5 References

• Learn the history of how troops and equipment

have been provided by Member States to UN

peacekeeping missions.

• Explain the development of the reimbursement

process for troop costs.

• Describe how and why the COE system was

developed and state its goals and objectives.

• Become familiar with various references that

apply to the provision of troops and equipment

to UN missions and the related reimbursement

procedures.

In Lesson 1, the student will be exposed to the history of how troops and equipment have been provided by Member States to UN peacekeeping missions.

UN Photo #424402 by Olivier Chassot.

The Evolution of Troop and COE Reimbursement1

LESSON 1 | THE EVOLUTION OF TROOP AND COE REIMBURSEMENT

17

Introduction

The lesson will cover the development of the

reimbursement process for troop costs. Reimbursement

for COE up to 1996 will also be discussed as a prelude

to the emergence of the current COE system.

This lesson will explain how and why the COE

system was developed and state its goals and

objectives. A chronological presentation will take the

student through the five phases of Working Groups

that prepared the concept and the associated UN

regulatory meetings that led to the General Assembly’s

approval of the system and procedures.

The lesson will close with a segment on the

various references that apply to the provision of

troops and equipment to UN missions and the related

reimbursement procedures. It will be stressed that the

A view of UNEF Position 105 which is manned by members of the Austrian Battalion. 20 December 1973. UN Photo #76039 by Yutaka

Nagata.


18

student becomes familiar with these references, both for success with the course and, more importantly,

for use by Member States on actual missions. Applicable excerpts from the references will be provided

as part of the course package.

Section 1.1 The Evolution of Troop Costs1

The history behind the development and setting of troop costs is important because it represents the

underlying principles used for the COE system. Troop cost reimbursement was originally created in 1974.

Based on a study conducted by the UN Secretariat in conjunction with troop-contributing countries, an

amount of $500 per person per month would be paid for services rendered on peacekeeping missions.

Additionally, a standard rate of $150 per month would be paid to troop-contributing countries for a

limited number of specialists to provide support to contingents. The rates were reviewed every 2-3

years up until 1991. From July 1991 until 2014, troop costs were set at $988 per person per month for

pay and allowances (all ranks), $291 per person per month for supplementary payment for specialists,

for up to a maximum of 25% of logistic units and up to 10% of other units.

Back in 1974, the General Assembly also approved a monthly allowance per person for clothing,

personal equipment (including weapons), and ammunition. The rates were set at $65 per month for

personal equipment and clothing and $5 per month for ammunition. Thus for each contingent member,

the TCC/PCC was reimbursed a combined amount of $1058.

In determining reimbursement rates for troops, the initial study considered three underlying

principles:

• Troops serving side by side should be reimbursed on the same basis for identical services;

• No Government should receive higher reimbursement than its actual costs — in other words, no

Member State should “profit” from its participation in the operation; and

• Some governments would not be fully reimbursed based on any standard cost formula, but

they should be reimbursed at least the amount that was paid to their troops as actual overseas

allowance.

In 2014, troop cost reimbursement was reviewed, and the following all-inclusive new rates were

approved:

• (a) Troop costs at the rate of $1,332 per person per month from 1 July 2014;

• (b) Troop costs at the rate of $1,365 per person per month from 1 July 2016;

• (c) Troop costs at the rate of $1,410 per person per month from 1 July 2017.

The contingent personnel will receive directly from the peacekeeping mission a daily allowance

of $1.28 plus a recreational leave allowance of $10.50 per day for up to 15 days of leave taken during

each six-month period.2

Section 1.2 The Focus on COE Reimbursement

1) For more information on how the UN pays for peacekeeping operations, see: Financing peacekeeping. United Nations Peacekeeping (UN News Center). <http://www.un.org/en/peacekeeping/operations/financing.shtml>.

2) These specific numbers are taken from Annex A of United Nations, General Assembly, Manual on Policies and Procedures Concerning the Reimbursement and Control of Contingent-Owned Equipment of Troop/Police Contributors Participating in Peacekeeping Missions (COE Manual), A/C.5/69/18 (20 January 2015), available from <http://www.un.org/en/peacekeeping/documents/2014_COE_Manual.pdf)>.


19

Members of the Polish contingent of the United Nations Disengagement Observer Force (UNDOF)

on patrol. 26 June 2008. UN Photo #184767 by Gernot Payer.

During the 1970s, the UN also developed a methodology for reimbursing Member States for the

provision of equipment to peacekeeping missions. For the most part, the UN “purchased” the use of

equipment through Letters of Assists or Notes verbale. Since most mission roles were as observers,

commercial pattern or light military vehicles and equipment were sufficient. Even major confrontation

areas with over 1,000 troops each, such as UNFICYP, were primarily static observer forces whose

requirements could be satisfied through a simple UN support organization or by Member States’

voluntary contributions if the funds ran short.

To control the use and reimbursement of contingent-owned equipment, the UN developed a system

of surveys to count and catalogue material as it arrived in the mission area. The In-Survey identified

ALL items brought by the contingent. The Out-Survey listed ALL items returning to the Member State.

For all returning equipment, Member States were reimbursed for depreciation costs while the equipment

was in the mission area. The difference between the surveys was considered equipment losses and

could be reimbursed at the value established during the In-Survey. Reimbursement was based on the

Member State providing the proper document filed at the time of the loss (Loss or Write-off Reports).

In the mid to late 1970s, the complexity of mission equipment started to increase wherever a

strong military presence was required of observer missions, such as UNEF II, UNIFIL, and UNDOF. By

the late 1980s, the simplicity of the In/Out Survey was insufficient to keep pace with the growing list

of equipment and support. The survey process was quickly becoming an administrative burden for both

the UN Secretariat and Member States. Moreover, the deployment time for contingents became shorter

as UN forces were rapidly deployed to ceasefire operations in Iran, Iraq, Afghanistan, and Angola. By its

very nature, the Survey process was time-consuming and bureaucratic. The time and workload to settle

reimbursement claims following redeployment of contingents grew steadily.

As the size and complexity of UN forces grew, so did the focus of both the Member States and the UN

on the cost of equipment and support. Member States were caught between both the desire to provide

suitably-trained equipment contingents and the difficulty in receiving all or partial reimbursement.

The UN Secretariat was experiencing a substantial increase in workload and personnel devoted to

reimbursement. In addition, DPKO faced increasing dissatisfaction from Member States and varied


20

standards in contingent-owned equipment and support provided in mission areas.

Section 1.3 Reform Project Plan and Timeline

In order to simplify the process of reimbursement for contingent-owned equipment, and thereby

reduce the lead-time associated with the payment of claims, a project plan was established to develop

a new methodology for reimbursement for COE and support. This development process began with

the Secretary-General’s Report A/48/945, and the report of the Advisory Committee on Administrative

and Budgetary Questions (ACABQ) A/49/664, in which problems related to the planning, budgeting,

and administration of peacekeeping operations were presented to the General Assembly. The General

Assembly, by Resolution 49/233 of 23 December 1994, authorized the Secretary-General to proceed

with a reform of the procedure for determining reimbursements to Member States for contingent-owned

equipment provided to peacekeeping missions. This effort was divided into five phases.3

The Phase I and Phase II Working Groups, made up of technical and financial experts from Member

States, met with Secretariat representatives from January to March 1995. Six Member States presented

written proposals for a reform of the methodology, all focusing on a flat rate reimbursement system.

The Groups recommended that reimbursement to the Troop/Police-Contributing Country (TCC/PCC)

be made on the basis of a “wet lease”, whereby the TCC/PCC would provide major equipment and

maintenance. A second option was a “dry lease”, whereby the TCC/PCC would provide only major

equipment, with the UN assuming responsibility for maintenance.

These Working Groups recommended that minor equipment and consumables not directly related

to major equipment be reimbursed as “self-sustainment” based on troop strength. Self-sustainment

categories are not subject to accountability upon entry into and departure from the mission area, but

rather to verification and inspection to ensure that they meet the agreed standards and mandate of the

contingent. When a contingent provides less major equipment or self-sustainment than that is stipulated

in the Memorandum of Understanding (MOU), the TCC/PCC will be reimbursed only for actual numbers.

In preparation for the Phase III Working Group, the Secretariat convened a meeting in May 1995

to gather cost data from Member States in order to determine the baseline rate of major equipment

and self-sustainment reimbursement. In July 1995, the Working Group met and developed the first rate

tables (examples of which are provided in Lesson 9 and Appendix C). The Working Group also finalized

the general principles of the COE system and prepared recommendations for UN General Assembly

approval and the establishment of a subsequent Phase IV to obtain General Assembly approval and to

implement the COE system.

The basic principles of this system are simplicity, accountability, and financial and management

control. This is accomplished by reducing the administrative burden on TCC/PCCs, the Secretariat, and

the peacekeeping missions; standardization of reimbursement rates will be determined on an equitable

basis based on the standards to be applied to equipment and services to be provided. Moreover, the

Secretariat wanted to ensure that the new system allowed the UN to pay for what it wants, not what it

gets.

Furthermore, accountability and control are ensured by the system relying on an a priori agreement

(Memorandum of Understanding) between the UN and the TCC/PCC for the leasing of equipment and

3) To learn more about ACABQ, visit <http://www.un.org/ga/acabq/about>.


21

the provision of services to personnel. This MOU eliminates the need for detailed surveys of equipment,

spare parts, and consumables, and it puts the emphasis on the TCC/PCC for asset management.

Phase IV Implementation was launched when the General Assembly, by Resolution 50/222 of 10

May 1996, authorized the implementation of new procedures for determining reimbursement to Member

States for contingent-owned equipment. A major focus of this phase was the development of the Manual

on Policies and Procedures concerning the Reimbursement and Control of Contingent-Owned Equipment

of TCC/PCCs Participating in Peacekeeping Missions (hereafter called COE Manual). The first COE Manual

was completed in October 1996 and detailed the procedures authorized by the General Assembly. The

COE Manual replaced the previous methodology whereby the TCC/PCCs were reimbursed based on the

In- and Out-Surveys and depreciation of equipment. The outcome of this phase was a report back to the

General Assembly on the implementation of the COE system.

The fifth phase of the reform project covers ongoing process improvement and reporting to the

General Assembly. The Phase V Working Group reviewed the rates in February 2001 and examined

lessons learned from the implementation of the COE system. A post-Phase V Working Group reviewed

the draft COE Manual that had been in use since the COE was adopted in 1996. The results were

incorporated in a new version of the COE Manual released in October 2001.

The Working Group was again convened in 2004 to review the COE system, its rates, and the

contents of the COE manual. The recommendations of the Working Group and those of the Secretary-

General were adopted by the General Assembly by Resolution 59/298 on 31 August 2005. A new

version of the COE Manual was provided to the General Assembly for translation and distribution on 22

December 2005. Working Groups were convened in 2008 and 2011 to review progress of the systems

Wide view of the Advisory Committee on Administrative and Budgetary Questions (ACABQ)

conference room, during the meeting of Joseph Deiss, President of the sixty-fifth session of the

General Assembly, and the members of the ACABQ. 24 February 2011. UN Photo #464528 by

Paulo Filgueiras.


22

and ascertain any required changes to the manual.

The latest Working Group convened in February 2014 and submitted its report in late March. The

General Assembly through its Resolution 68/282 of 30 June 2014 adopted the recommendations of the

2014 working group. A new version of the COE Manual (A/C.5/69/18) was released on 20 January 2015

to incorporate changes approved by the General Assembly.

Section 1.4 The COE Manual

The COE Manual is a primary document that governs reimbursement under the COE system. The

COE Manual is a consolidation of the recommendations of the Phase II, III, Iv, v and post-Phase v,

2004, 2008, 2011, and 2014 Working Groups as approved by the General Assembly and provides

clarifications and explanations, where required, on the implementation of these decisions. The COE

Manual contains the policies, procedures, and actions to be followed by UN Headquarters and Missions.

The COE Manual is intended to provide assistance to the TCC/PCC and ensure that the decision of the

General Assembly is fully and consistently implemented. The procedures used in the implementation

of the General Assembly decisions may be amended from time to time to take into account changing

circumstances and experience gained.

One of the COE Manual’s goals is to facilitate the preparation of MOU to deploy troops and equipment

to peacekeeping operations. The scope of the COE Manual primarily covers the administrative,

logistical, and financial aspects related to the contingent-owned equipment (major equipment and self-

sustainment). However, in order to facilitate a TCC/PCC’s participation in UN operations, the COE Manual

contains additional information relating to deployment/re-deployment of personnel, procedures for

Death and Disability claims, painting/repainting claims, inland transportation claims, and the provision

of goods and services to contingents by the UN.

The COE Manual should be read in conjunction with other related documents such as the Operation

Support Manual, the Guidelines (Aide-Mémoire) to TCC/PCCs (mission-specific and issued before

deployment of troops), and the United Nations Standby Arrangements System in the Service of Peace

and the Tables of Organization and Equipment (2009).

It is the responsibility of the Director of the Field Budget and Finance Division (Department of Field

Support) to maintain and update the COE Manual.

Section 1.5 References

Every effort was made to ensure the accuracy of the COE Manual. However, in the event of

discrepancies between the COE Manual and the documents of the General Assembly, the resolutions/

reports approved by the General Assembly shall prevail. The following are the main reports and

resolutions covering the reform of the reimbursement methodology. These documents should be

consulted when developing MOUs.

COE Manual »The latest version of the COE Manual can be downloaded at <http://www.un.org/en/peacekeeping/

documents/2014_COE_Manual.pdf>.


23

Reference Document DatePhase II Working Group recommendations A/C.5/49/66 2 May 1995Phase III Working Group recommendations A/C.5/49/70 20 July 1995Secretary-General’s summary to the General Assembly of the recommendations of the Working Groups

A/50/807 8 December 1995

ACABQ review of SG’s observations and Working Group recommendations

A/50/887 6 March 1996

General Assembly resolution authorizing implementation of the COE system

A/Res/50/222 10 May 1996

Phase IV Working Group recommendations A/C.5/52/39 23 February 1998Secretary-General’s report on the first year of implementation A/53/465 7 October 1998ACABQ review of the Phase IV recommendations A/53/944 6 May 1999General Assembly Resolution to adopt the recommendations of the Phase IV Working Group

54/19 22 November 1999

Phase V Working Group recommendations on system improvements A/C.5/54/49 16 February 2000Secretary-General report on the continuous improvement process A/54/795 14 March 2000ACABQ review of the Phase V report A/54/826 3 April 2000General Assembly resolution to adopt the recommendations of Phase V Working Group

A/Res/54/19B 14 July 2000

Post-Phase V Working Group recommendations A/C.5/55/39 7 March 2001The Secretary-General summary of the post-Phase V report A/55/815 1 March 2001ACABQ comments and proposal on the post-Phase V report A/55/887 4 April 2001General Assembly resolution to adopt the recommendations of post-Phase V Working Group

A/Res/55/274 22 June 2001

Report of the 2004 Working Group on Contingent-Owned Equipment

A/C.5/58/37 19 April 2004

Secretary-General report on the 2004 Working Group A/59/292 24 August 2004ACABQ report A/59/708 22 February 2005General Assembly Resolution A/Res/59/298 31 August 2005Report of the 2008 Working Group on Contingent-Owned Equipment

A/C.5/62/26 14 March 2008

Secretary-General report on the 2008 Working Group A/62/774 17 April 2008ACABQ report A/62/851 30 May 2008General Assembly Resolution A/Res/62/252 20 June 2008

Report of the 2011 Working Group on Contingent-Owned Equipment

A/C.5/65/16 2 March 2011

Secretary-General report on the 2008 Working Group A/65/800 28 March 2011ACABQ report A/65/830 28 April 2011General Assembly Resolution A/Res/65/292 26 August 2011Report of the 2014 Working Group on Contingent-Owned Equipment

A/C.5/68/22 28 March 2014

Secretary-General report on the 2008 Working Group A/68/830 15 April 2014ACABQ report A/68/867 7 May 2014General Assembly Resolution A/Res/68/282 30 June 2014


24

Summary

The responsibility of the UN is to ensure that the peacekeeping mission is provided with the

personnel and equipment required to fulfil its mandate and to ensure that the TCC/PCC provides

personnel, equipment, and services as detailed in the specific MOU and that the contingents perform

according to the established standards. The reform of the methodology for reimbursement for COE was

a monumental step forward in realizing that responsibility. The COE system also brings standardization

to this major element of UN finances.

This system is a major departure from previous practices, as it is focused on management rather than

accounting for contingent-owned equipment. It is performance-driven and provides for transparency

of deployment as well as accountability. It is designed to enable Member States to appreciate their

commitment to peacekeeping at the outset, thus leading to simplified budgeting and reimbursement.

A further key benefit is that missions will be able to implement an integrated management structure in

the field.

Secretary-General Ban Ki-moon

addresses the meeting of

the General Assembly’s Fifth

Committee (Administrative

and Budgetary) to consider

the UN Proposed Programme

Budget for 2016-2017. Mr Ban

proposed a budget level of

$5.57 billion for that biennium.

12 October 2015. UN Photo

#648913 by Cia Pak.


25

COE Calculations »Please visit your student classroom online to access Chapter 8, Annex A of the 2014 COE Manual.

Annex A lists the reimbursement rates for major equipment for dry or wet leases. All rates listed are

effective 1 July 2014.

These rates will help you with the calculations in the End-of-Lesson Quizzes as well as the End-of-

Course Exam.

Secretary-General Ban Ki-moon

(at mic) addresses the staff of

the United Nations Logistics

Office in Brindisi, Italy. 19 April

2007. UN Photo #143239 by

Eskinder Debebe.


26

End-of-Lesson Quiz »

1. When was the Troop Cost Reimbursement System originally created?

A. 1974

B. 1981

C. 1991

D. 1995

2. How much do contingent personnel receive a month (30 days) for daily living allowance?

A. $1.28

B. $38.40

C. $11.78

D. $353.40

3. What is the maximum percentage of specialist troops for which a logistics unit will be reimbursed?

A. 25%

B. 10%

C. 0%

D. 65%

4. Which of the following statements does not represent one of the underlying principles in determining the new reimbursement rates for troop contributions?

A. Troops serving together will receive equal pay

for equal services rendered

B. No government shall be able to profit

from their participation in a peacekeeping

operation

C. The responsibility for management aspects of

reimbursement rates is shifted from the UN

to the TCC/PCCs

D. Governments will be reimbursed a minimum

amount of the overseas allowance paid to

troops

5. When did the General Assembly authorize the implementation of the new reimbursement system?

A. 23 December 1994

B. 6 March 1995

C. 20 July 1995

D. 10 May 1996

6. Which of the following is not a basic principle of the COE system?

A. Simplicity

B. Accountability

C. Flexibility

D. Management

7. Which statement best describes the difference between the wet and dry lease of minor equipment and consumables?

A. A wet lease includes equipment and its

maintenance, while a dry lease provides only

equipment

B. A dry lease includes equipment and its

maintenance, while a wet lease provides only

equipment

C. A wet lease includes equipment and its fuel,

while a dry lease provides only equipment

D. There is no difference between the leases, as

minor equipment and consumables are self-

sustaining

8. Who participated in Phase I and II of the Reimbursement Reform Working Group?

A. The UN Secretariat

B. Member States

C. The Secretariat and Member States

D. The General Assembly, ACABQ, and the

Secretariat

Answer Key provided on the next page.


27

End-of-Lesson Quiz »

Answer Key »1. A

2. B: $38.40=$1.28 * 30

3. C: 0% - it is no longer separately reimbursable

4. C

5. D

6. C

7. A

8. C

9. A

10. D: $199,800 (150 * 1332)

9. Which of the following is not a benefit of the reformed reimbursement system?

A. Renewed use of detailed surveys in

accounting for contingent-owned equipment

B. Implementation of a field-integrated

management structure

C. Providing transparency of deployment and

accountability to Member States

D. Simplification of budgeting and

reimbursement procedures

10. For a self-supporting unit of 150 troops, what would be the maximum monthly reimbursement for pay, allowance, clothing, and ammunition in 2015?

A. $148,200

B. $158,700

C. $169,695

D. $199,800

Documents

Advanced Topics in United Nations Logistics: The Provision ... · Lesson 2 Standard Elements of the COE System and Lease Options. 28. Section 2.1 Implementation 30 ... Section 5.2